Adam Carolla lost his job when CBSRadio switched KLSX‘s format from talk to pop music, so he turned to podcasting his show. Turns out that was a pretty smart decision. Within 24 hours, Carolla’s first show had been downloaded more than a quarter of a million times from iTunes.
According to an article in LA’s Daily News, The Adam Carolla Podcast has frequently been the No. 1 podcast on iTunes, which ranks them according to popularity. It has consistently charted ahead of such staples as NPR’s “This American Life,” HBO’s “Real Time with Bill Maher,” “The Ricky Gervais Podcast” and President Barack Obama’s weekly address.
Carolla’s past radio roles include co-host of the popular syndicated sex talk show “Lovelines“, and the DJ that replaced Howard Stern in 2006 when he went to satellite radio. Popular enough to have been on Dancing With The Stars, he’s pleased with the success of his podcast. He believes a subscription based business model makes sense for his edgy show, because then he can say whatever he wants without feeling beholden to advertisers or sponsors.
A growing number of popular radio personalities are building direct audiences for their shows with podcasting. Carolla says it would be hard to go back to terrestrial radio, which would feels very limiting after this. As Podcasting News points out, “with over a million views in the first week, the Adam Carolla Podcast shows that broadcasters can have hit shows without the support of a radio platform.”
It’s no secret that radio revenues are in a tailspin. According to a BIA Advisory Services Forecast published last week, radio revenue in the top 50 markets will drop 11% this year, with mid sized and small markets down a slightly lower 9.4%. This on top of an 8.5% drop last year.
Online platforms continue to be radio’s growth opportunity. According to the report online revenue nearly quadrupled last year, growing from $67 million to $247 million. It doesn’t stop there – on average, online revenue is expected to increase an average of $132 million through 2013.
“Technological advances such as online advertising, mobile device advertising and other new-to-radio advertising could be a solution for offsetting declines in traditional radio revenues, especially in larger markets where these options could have a greater effect.” says Mark Fratrik, vp for BIA Advisory Services.
Deloitte Consulting technology expert John Ruffolo agrees that the increasing popularity of online radio – driven by expanding wifi and mobile devices that can stream stations – may be the savior that radio needs. As the popularity of online radio increases, more and more advertisers are investing in it, spelling revenue growth for stations. Broadcasters that stream online are poised to take advantage of the growth in online radio dollars.
For in depth information on building and monetizing online platforms, attend Internet Radio’s Main Event, the RAIN Summit, April 20th in Las Vegas, sponsored in part by Audio4cast.
The ever optimistic HD Radio fans, in the form of an HD Radio Alliance, claimed progress in a recent announcement that 1000 stations are now broadcasting a digital HD2 channel, and 100 different models of HD Radios are now for sale. According to the Washington Post report, it’s remarkable that broadcasters have invested what it takes to get to the 1000 mark, given that the vast majority of their listeners can’t hear them because they do not have an HD Radio.
The 100 model mark for HD devices is less impressive, given that it’s taken five years to get that far and the most inexpensive model is $79. Not to mention that the devices are not well merchandised at any store I’ve ever been in – do you ever see a sale on HD Radios, or one advertised in a Best Buy flyer? Or an even better question – do you know anyone who even knows that HD Radio exists, or is considering purchasing one – or better yet, do you know anyone that has one?
As I have said before, the best bet for broadcasters who are already in too deep with investments in this technology (or in Ibiquity itself), one benefit is that these alternative channels can also be streamed online, where they’ll likely find a larger audience, and make the investment in the programming of the channel more worthwhile.
AndoMedia has released their monthly listening data for February, recording audience growth for most of the top measured groups. AndoMedia’s Webcast Metrics measures subscribing stations and provides a monthly snapshot of audience data for the groups they measure.
The Katz Online Network, which includes many of the groups listed on the ranker saw about 4% growth in both its AQH and Cume. CBS and Clear Channel both saw even bigger AQH growth than that – 9% and 8% respectively, and CBSRadio’s Network Cume increased by 13% from last month. Other winners in growing audience were online multi channel brands 977Music (9%) and Accuradio (6%), and Citadel’s group of streaming stations (11%).
It’s interesting to note that the ratio of AQH to Cume (turnover) is consistent among many of the top performers in the ranker, with a few exceptions. Citadel, Cox and Clear Channel have the lowest turnover of any of the groups in the top ten, and CBSRadio has the highest. AOL’s Radio streams contribute lots of Cume to CBS’ number, but those listeners are not necessarily converting to long listening sessions, while Clear Channel and Citadel, who are likely converting lots of broadcast listeners to online listeners, are getting longer listening sessions from their online listeners.
There’s definitely a place for Internet radio at work, according to an article on CNN.com. Listening to music at work can help workers focus and increase productivity. Headphones at work have made it possible for workers to personalize their listening, allowing them to pick music that fits the job at hand and their surroundings, and Internet radio gives people lots of choices as far as what they would like to hear.
Many of today’s workers are in front of a computer all day long, so Internet radio is readily available. Says CNN: “Vincent Paciariello, an account executive at DM Public Relations, has become an Internet radio aficionado who knows the pros and cons of various stations. He likes Sirius for certain talk programs, AOL Radio for its extensive catalog of genres and Pandora Radio to discover new artists.”
The ability to add music to the workday can increase motivation and make the time go faster. CNN does offer some advice to workers who are listening online while they are at work: use the pause button when the phone rings, use headphones and keep the volume low so you can hear a co-worker call your name, and keep the dance moves to a minimum…
RAIN: The Radio and Internet Newsletter has announced a preliminary agenda and some speakers for the upcoming annual Internet Radio event of the year – the RAIN Summit. This event takes place each year during the NAB Show in Las Vegas, this year the one day conference is Monday April 20th at the Renaissance Hotel in Las Vegas. Make plans now to attend.
A panel discussion focused on business strategies for monetizing Internet Radio (hosted by yours truly) will feature competitive perspectives from Katz 360’s Brian Benedik, Targetspot’s Doug Perlson and Google Audio’s Jag Duggal. Other panels will feature discussions of mobile options for extending the distribution channels of online stations, a discussion of various options for audience measurement, and an overview of the industry’s legal issues.
Kurt Hanson, Publisher of RAIN and noted Internet Radio expert, will provide a keynote speech on the Future of Radio. In addition to a full day of panels and presentations, the day concludes with the not to be missed RAIN Cocktail Party. If you’re involved in the business of Internet radio, you will not want to miss this opportunity to network and learn from industry experts.
To register for the RAIN Summit click here. See you there!
A new report summarized in Mi2N shows that purchases of online digital music downloads increased by 29 percent since last year and now account for 33 percent of all music tracks purchased in the U.S. At the same time, according to The NPD Group, the leader in market research for the entertainment industry, the number of Internet users paying for digital music increased by just over 8 million in 2008 to 36 million Internet users.
Download Purchases Up, CD Sales Down
Unfortunately for the music industry, those increases come at the same time as a huge decrease in cd sales — NPD’s Digital Music Study, an annual tracking study covering the music industry, also revealed that there were nearly 17 million fewer CD buyers in 2008 compared to the prior year. “Rising incidence of paid downloads is a positive development for the industry, but not all lost CD buyers are turning to digital music,” said Russ Crupnick, entertainment industry analyst for The NPD Group.
Consumers’ reasons for purchasing less cds were primarily recession based – they were either just spending less on entertainment, or they said the price of cds was causing them to buy less.
Listening to Music Online is up
The report did find that listening to online music streams is increasing – specifically, awareness and usage of Pandora, a leading online radio station, doubled year over year to 18 percent of Internet users. The percentage of consumers claiming to listen to music on social networks – presumably sources like MySpace Music and Last.fm – climbed from 15 percent in the fourth quarter (Q4) of 2007 to 19 percent in Q4 2008.
Nearly half of U.S. teens are engaging with music on social networks, which is an increase from 37 percent a year ago; among college- age Internet users, the percentage increased from 30 percent in 2007 to 41 percent in 2008. In summary, the report notes that the music industry now has to redouble efforts to intercept and engage these listeners, so they can create revenue through upselling music, videos, concert tickets, and related merchandise.
This week independently owned WBEB in Philadelphia stopped streaming, claiming that the newly announced performance royalty deal is to blame. To industry watchers this should come as no surprise. In fact, station management took a wrong turn when they started streaming and decided to simulcast the broadcast station in its entirety rather than sell different ads online.
WBEB Chose Not to Sell Online Ads
WBEB was one of a relatively small number of stations that decided to simulcast its stream completely – including ads – rather than use ad insertion technology to implement a separate traffic log on the stream and monetize the online station separately. This decision was done in favor of qualifying for PPM measurement of the stream by Arbitron – which can only be done if the stream is a 100% simulcast of the over the air programming. Read more about that here.
Internet Radio Ads Should Be Different than Broadcast Ads
It’s a flawed strategy – Internet radio cannot be monetized effectively as a simulcast to a broadcast station. The creative must be different, the advertisers are often different, and the audience is certainly different. Prime time online is midday, when the audience is at work, and online; whereas broadcast stations’ prime time is drive time, when its audience is on the move. Trying to sell campaigns that fit both mediums is sure to create lackluster results.
The performance royalty is definitely the main expense of operating an Internet radio station – it might even be likened to the expense of maintaining and operating a radio tower. At this point, that royalty is a given, and broadcasters who are not interested in developing a dedicated online strategy for monetizing it should probably stay on the sidelines.
Clear Channel made several streaming related announcements this week: It’s IHeartRadio IPhone application reached 1 million downloads, and is now available for Blackberry users as well. Clear Channel’s concerted effort to distribute its stations online and on mobile apps has resulted in overall audience growth for stations of 15%.
In an article published on WashingtonPost.com, Evan Harrison, President of Clear Channel Online Music and Radio explains that Clear Channel attracts 20 million unique visitors a month online, and the iPhone mobile app attracts 146,000 unique listeners a week. Harrison said the investment is justified. “Literally in LA, there are likely 20,000 to 25,000 more listeners between online and cellphones. It’s like adding another radio station. We are growing the audience, and there are more opportunities.” He added: “For us, it’s paramount that we make it easy for our listeners to stay connected with our stations, whether it’s at their desk, in their car or while mobile.”
Eliot Van Buskirk of Wired says Clear Channel’s success in reaching a million downloads “on IPhone shows that a real demand exists for mainstream radio on the iPhone. “Clearly,” he concludes, “people want mainstream radio programming — ads and all — on their phones.”
Clear Channel has done a nice job of leading mainstream broadcasting’s transition to the IPhone. The IHeartRadio App is nicely done with an option to pause and restart the stream, lyrics for most songs, and a Shake It feature for finding a random station. And, of course, you can tag the songs if you want to buy them from iTunes. Reportedly, there is a bug in the IPhone app, causing some phones to crash, which they are aware of and working to resolve with Apple. In the meantime, Clear Channel is focused on creating as many ways to distribute their programming on new devices and media channels, and it’s growing their business by growing audience for their products.
South By Southwest, the legendary music festival in Austin Texas, has in recent years also become an interactive festival, and a magnet for new digital and social media . This year, Pepsi is sponsoring Internet radio station BlogTalkRadio, as they broadcast live from the festival.
Global Director of Digital and Social Media for Pepsi Bonin Bough talked about Pepsi’s reasons for being at SXSW and sponsoring BlogTalkRadio. South By Southwest is a festival that has cultivated its image with digital and social media content creators. It’s hugely attended by cutting edge social media players. According to Bough, Pepsi’s sponsorship is all about being at the crossroads of digital content creation, sponsoring and enabling it.
BlogTalkRadio is an interesting hybrid of an Internet radio station and a blogging/social media site. Their coverage at South By Southwest, sponsored by Pepsi, includes Digital SpeakEasy – a program that highlights what’s new in digital and social media, and Podcast Playground – a place where people can actually record and stream podcasts from SXSW. I’ve noticed a bunch of tweets about Podcast Playground on Twitter the past couple of days, so if the goal is to create buzz, they must be happy.
Bough said the sponsorship of BlogTalkRadio is a way for Pepsi to connect with its customer base in a way that’s very different than a banner click. Twitter, Web Radio, Facebook, You Tube are places where Pepsi is experimenting, according to Bough. Evaluation of these media is not based on a strict click through evaluation, but more focused on connections rather than impressions. “The upside is the potential relationship that we can build,” he says.
It’s great to see Pepsi exploring Internet radio at such a visible venue, and to see BlogTalkRadio creating the kind of unique sponsorships that got Pepsi involved. No doubt other advertisers are taking notice.